Along with box-office collections, producers are increasingly looking at off-screen deals as an alternative source of revenue
Long before Sanjay Leela Bhansali’s Saawariya and Farah Khan’s Om Shanti Om battled it out at the box-office, both the films tried to outdo each other at off-screen marketing initiatives too. To mention just a handful, while Saawariya signed a deal with the Future Group, worth Rs 10 crore, for merchandising products like apparel, bed and bath linen, and beauty products, the Om Shanti Om team tied up with Shoppers’ Stop for Rs 6-7 crore and also with brands like Sia Jewellery and Nokia. Both films left no stone unturned in tapping revenues through merchandising and “outside associations” with other brands. It was a trend started by the Barjatyas way back in 1994 with Hum Aapke Hain Kaun when the traditional film production house tied up with Archies for merchandising the film. Now, most filmmakers strive to earn big bucks through various alternative revenue streams. And though the Indian film industry is nowhere near what Hollywood has managed to achieve in merchandising—think Spiderman, Harry Potter or, perhaps, the best example of all, Star Wars, it is waking up to the potential of merchandising and outside associations as a major revenue magnet.
Says Sheetal Choksi, customer care associate and VP marketing and communications, Shoppers’ Stop: “Tie-ups and brand deals are mostly made for a relevant merchandise association. We felt that Om Shanti Om was the right film for us to associate with. Outside associations help to market a film but it is not just about merchandising and tie-ups, the brand should target the right kind of consumers as well”.
So, while it’s too early to call film merchandising an allied industry in India, according to Darshana Bhalla, CEO, Madison MATES, “given the retail boom in the country, merchandising adds to the marketing muscle of the film.” But she also points out that to make film merchandising and outside associations work as a separate revenue model, producers need to invest more. “In India, products are merchandised only in the country, whereas in Hollywood they are popularised across the globe,” she adds. That said, according to industry estimates, though outside associations in India are still a small business opportunity, films can recover almost 10%-15% of the costs through this non-traditional revenue model.
Navin Shah, CEO, P9, the company that did the merchandising for Saawariya, says the whole business of branded entertainment is being driven by “outside associations” which is growing at a whopping 200% year-on-year. According to Shah, any film if marketed well can surely leave an impression in the minds of the audience. “An outside association helps in drawing attention to a film. The kind of association that is done for a film, however, has to be thematic and in sync with the concept of the film.”
That’s what forced the Barjatyas to refrain from merchandising for Vivah, a sleeper hit starring Shahid Kapoor and Amrita Rao. “It is important for a film to realise that merchandising never works if it is not done subtly. We were approached by various apparel and jewellery brands for Vivah and we found the proposition rather tempting but we decided against it as it seemed like a force-fit,” says Rajjat Barjatya, MD, Rajshri Media.
But Barjatya admits that outside associations and merchandising help in generating a revenue stream that augments a non-traditional revenue method and a marketing scheme which ensures that the brand breaks away from the clutter and reaches the homes of consumers. Ask him why Hollywood is a master at merchandising and he quips: “Indian films are story-driven, Hollywood films are character-driven, and thus it becomes easier for them to maximise revenues through merchandising.”
Seen from a marketer’s perspective, through outside associations, brands can reach out to consumers in a completely non-competitive manner. But, points out Nabeel Abbas, CEO, Epigram, which promoted films like Lagaan and Mangal Pandey, outside associations should be planned in advance and incorporated from the scripting stage itself.
He cites Lagaan as an example. “While promoting Lagaan, a lot of curiosity was generated as the film market was new to the concept of outside associations. Merchandising for the film started before the film released and was carried out right till the film released. Brands like Britannia, Hotmail, MSN and Archies were roped in to promote the film.”
But both merchandising and outside associations have their limitations. “Merchandising as well as outside associations add to the popularity of the film but it is through promotions that the film recovers maximum revenues,” explains Abbas. Also involved with marketing the delayed Hrithik Roshan and Aishwarya Rai-starrer, Jodha Akbar, Abbas mentions that due to the long period required for the release of a film, there are risks involved. “We have to analyse the market and see if there is a demand for the product.” But Abbas also points out that within two to three years, outside associations should be a major revenue stream as it is important to create film properties and franchise film products so that the film lives longer.
Says Shikha Kapur, assistant VP, marketing, motion pictures, UTV: “An outside association gives audiences the broader picture of the film and makes them appreciate it outside theatres.” Dhan Dhana Dhan Goal, which is a UTV production, has tied up with Reebok to merchandise sports accessories and football apparel of the film.
The merchandise is already in Reebok stores. “Goal has entered into a 360-degree marketing deal with Reebok fashion. The scale of the film was such that it lent itself to merchandising. Outside association of this manner is a small aspect of the business revenue, but it helps to publicise the film,” adds Kapur.
As Choksi points out: “Merchandising can sometimes be very short-lived depending on the success of the film. There is a limited popularity period of any merchandise that is associated with a film, which may last only up to eight to nine months after the film releases.” Bhalla has a solution: “It is really important for a film to resort to in-film advertising together with outside associations and merchandising as the brand lives in the minds of the consumer for a longer period.” But that’s another story.